After reviewing the Auditor General’s report in March, I immediately called for a meeting of Legislative Audit Commission to address the apparent failure of the current Administration to comply with the procurement code and provisions of the Ethics Commission.

I will continue to work with legislative leaders, the Audit Commission, the Department of Healthcare and Family Services, and the Executive Ethics Commission to clarify the statutes and improve the process by which vendors are selected.

HEALTH INSURANCE SUBSIDY REPEALED

On May 10, lawmakers took what proponents acknowledged was a difficult first step to bringing the state’s pension system back to solvency with the approval of Senate Bill 1313.

Passed by a 31-20 vote, the measure repeals the state’s health insurance subsidy, of up to 100 percent, for retired public employees with 20 years or more of service. The bill directs the state’s Department of Central Management Services to issue a retiree health insurance premium payment plan for retirees in the five state pension systems, including state employees, university employees, lawmakers and judges.

The premium plan is subject to approval by the Legislature’s Joint Committee on Administrative Rules. The measure now goes to the Governor, who has said he will sign it.

I voted for the bill. It was a difficult decision, necessary to get state spending under control. Illinois has the worst-funded pension system in the nation and that pension costs must be brought under control or the system could collapse. The Fiscal Year (FY) 2013 cost of the health insurance subsidy is $877 million.

GOVERNOR MUST RETAIN AUTHORITY ON CLOSURES

In other action, the Senate rejected legislation that would give lawmakers the power to override the Governor’s decision to shutter state facilities.

I voted against the bill. If Senate Bill 3564 had been approved, no facility closure could have commenced without the General Assembly adopting a joint resolution to accept or reject the advisory opinion of the Commission on Government Forecasting and Accountability’s (COGFA) about a proposed facility closure.

Currently, COGFA issues an opinion on closures, but the Governor has the final say.

According to the audit, the program’s former Director of Portfolio Management invested $500,000 in a firm that was bidding on a contract with College Illinois! At the direction of the Director, the program signed a $30 million investment contract on February 9, 2011; then the Director invested $185,000 in that same firm on February 25, 2011.

Additionally, a review of the program’s procurement process from FY 2006 to FY 2011 was, according to the audit, inconsistent and lacked “transparency, independence, documentation and compliance with procurement rules and the Procurement Code.” It was also during that time that program costs tripled from $6.4 million to $18.1 million.

Of note in the audit was a $14 million investment made in a manufacturer of luxury hybrid vehicles that media reports indicate cost more than $100,000. Though the return on the investment has been positive so far, the audit noted that the investment was made despite numerous risks outlined in the agreement.

Illinois Student Assistance Commission (ISAC) officials accepted most of the criticism in the audit, and plan to adopt changes in June in response to the findings. Specifically, the ISAC board has confirmed plans to consider a new conflict-of-interest policy at the June board meeting.

A recent survey by the nation’s top executives underscores the importance of addressing Illinois’ serious fiscal issues. Chief Executive magazine surveyed 650 top executives of companies who said Illinois trails the nation in business climate, beating out only California and New York in desirability.

Ranked 48 out of 50, Illinois’ taxation and burdensome regulations were cited by the CEOs as prime reasons the state’s business reputation is lagging. The state’s workforce quality and living environment received slightly better ratings, but failed to compensate for the high costs and hassle that comes with doing business in Illinois.

According to the publication, “Illinois has dropped 40 places and is now in a death spiral.” The magazine noted that Illinois’ bond ranking exceeds only California.

In comparison, survey respondents ranked neighboring Indiana the fifth best state for business, while our other neighbors—Wisconsin, Iowa, Missouri and Kentucky—hovered near the middle at 20, 22, 24 and 25, respectively.